Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 2, Problem 1WNG
To determine
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Assume you have a production possibilities frontier (PPF) bowed out from the origin with healthcare on the Y axis and education on the X axis.
What does the PPF represent?
How is opportunity cost demonstrated using the PPF?
Use the PPF to answer the following questions:
(a) At point F, how many sweaters are being produced? How many hard drives?
(b) Label points A-H as either efficient, inefficient, or unattainable.
(c) Can we determine if point F is productively efficient? If so, is it productively efficient?
(d) Can we determine if point F is allocatively efficient? If so, is it allocatively efficient?
In Kessy’s old kitchen, he could bake 10 cookies or mix 15 glasses of lemonade in a day. Now he has a bigger oven and kitchen.
Draw Kessy’s initial PPF assuming constant opportunity cost between cookies and lemonade. Label it PPF1. [For this question, let cookies be illustrated on the horizontal axis.]
Given PPF1, what is the opportunity cost of producing more cookies? In other words, how much lemonade must Kessy sacrifice to produce, say, one more cookie?
Draw Kessy’s new PPF (label it PPF2) after he receives the new appliances.
Chapter 2 Solutions
Economics (MindTap Course List)
Ch. 2.1 - Prob. 1STCh. 2.1 - Prob. 2STCh. 2.1 - Prob. 3STCh. 2.1 - Prob. 4STCh. 2 - Prob. 1QPCh. 2 - Prob. 2QPCh. 2 - Prob. 3QPCh. 2 - Prob. 4QPCh. 2 - Prob. 5QPCh. 2 - Prob. 6QP
Ch. 2 - Prob. 7QPCh. 2 - Prob. 8QPCh. 2 - Prob. 9QPCh. 2 - Prob. 10QPCh. 2 - Prob. 11QPCh. 2 - Prob. 12QPCh. 2 - Prob. 13QPCh. 2 - Prob. 1WNGCh. 2 - Prob. 2WNGCh. 2 - Prob. 3WNGCh. 2 - Prob. 4WNGCh. 2 - Prob. 5WNGCh. 2 - Prob. 6WNGCh. 2 - Prob. 7WNGCh. 2 - Prob. 8WNGCh. 2 - Prob. 9WNGCh. 2 - Prob. 10WNGCh. 2 - Prob. 11WNGCh. 2 - Prob. 12WNG
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- The PPF illustrates the principles of constrained choice, opportunity cost, and scarcity. Consider a PPF below for motorcycles and hybrid cars. D Motorcydes According to Figure above, as the economy moves from Point A to Point B, the opportunity cost of motorcycles, measured in terms of hybrid cars, increases. initially increases, then decreases. one decreases. remains constant. Hybrid carsarrow_forwardSuppose Argentina produces only smart watches and trucks. The resources that are used in the production of these two goods are specialized-that is, some resources are more suitable for producing smart watches than trucks, whereas others are more suitable for producing trucks than smart watches. The shape of Argentina's production possibilities frontier (PPF) should reflect the fact that as Argentina produces more trucks and fewer smart watches, the opportunity cost of producing each additional truck The following graphs show two possible PPFs for Argentina's ecor SMART WATCHES PPF 1 Graph 1 TRUCKS ? decreases increases remains constant SMART WATCHES PPF 2 PPF (PPF1) and a bowed-out PPF (PPF2). Graph 2 TRUCKS (?) Based on the previous description, the tradeoff Argentina faces between producing trucks and smart watches is best represented byarrow_forwardTRADE Prior to the global pandemic, the aggregate output of sweet potatoes(S) and green bananas (G) is given in the combinations below. All figures are written in thousands of lbs. Sweet potatoes (S) Green Bananas (G) 210 180 25 150 45 120 58 90 68 60 75 30 78 80 Using the table above, answer the following questions. a) Construct Dominica's PPF. b) Explain whether the rinciple of increasing opportunity cost аpplies. c) Explain ND ILLUSTRATE THE EFFECTS OF THE GLOBAL PANDEMIX ON Dominica's aggregate output. d) Assuming Dominica wishes to trade, t=what can be done to improve its ability to engage in mutually beneficial trade.arrow_forward
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